Jet Airways bailout plan: Employees' consortium to bid for cash-strapped airline; seeks to raise Rs 3,000 cr from outside investors

This is the first time that employees have come together with a proposal to run the more than 25-year-old Jet Airways

Press Trust of India April 30, 2019 07:39:19 IST
Jet Airways bailout plan: Employees' consortium to bid for cash-strapped airline; seeks to raise Rs 3,000 cr from outside investors
  • This is the first time that employees have come together with a proposal to run the more than 25-year-old Jet Airways

  • SBI Capital Markets, on behalf of the lenders' consortium led by the SBI, is managing the bidding process

  • Cash-starved Jet Airways stopped operations on April 17 after lenders decided not to extend emergency funds

New Delhi: As uncertainty continues over the fate of the shuttered Jet Airways, an employees' consortium has proposed to take over the airline with at least Rs 3,000 crore expected from outside investors for the bid, according to two staff unions. This is the first time that employees have come together with a proposal to run the more than 25-year-old Jet Airways, which temporarily suspended operations on 17 April.

Two associations representing pilots and engineers—SWIP and JAMEVA—have written to State Bank of India (SBI) Chairman Rajnish Kumar proposing that they would take over the airline and can bring in up to Rs 7,000 crore.

Jet Airways bailout plan Employees consortium to bid for cashstrapped airline seeks to raise Rs 3000 cr from outside investors

A Jet Airways employee holds a placard as he and others attend a protest demanding to "save Jet Airways" in New Delhi, Reuters

The Society for Welfare of Indian Pilots (SWIP) and the Jet Aircraft Maintenance Engineers Welfare Association (JAMEVA) have written a letter to the SBI chief asking the lead lender to consider "employee consortium" as an intending bidder for the carrier. While SWIP has around 800 members, there are about 500 employees with JAMEVA.

The contribution from employees would be realised from their future earnings and increased productivity... As per our initial estimate, the contribution of employees group over a hypothetical 5-year Employee Stock Ownership Programme (ESOP) is likely to be upward of Rs 4,000 crore.

"In addition, we are also confident of securing an investment commitment of up to Rs 3,000 crore from outside investors," the letter, dated 29 April, said.

The letter has been signed by four people—SWIP General Secretary Ashwani Tyagi, JAMEVA President Ashish Kumar Mohanty, Jet Airways Manager (Human Resources) B B Singh and Jet Lite Senior Vice President (Operations) and Accountable Manager P P Singh.

The deadline for submitting initial bids have already ended and the list of shortlisted entities is expected to be finalised on 10 May.

SBI Capital Markets, on behalf of the lenders' consortium led by the SBI, is managing the bidding process.

"We confirm that a proposal for employee takeover of Jet Airways has been submitted by us... We are optimistic that the banks and Government of India will give our plan a serious consideration," the two unions said in a joint statement.

Tyagi said the letter has also been signed by two officials of the airline.

Cash-starved Jet Airways stopped operations on April 17 after lenders decided not to extend emergency funds. Since then, employees have held gatherings in various cities and have also met various ministers with pleas to save the airline.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Indian shooter Manu Bhaker demands action against two Air India employees for alleged harassment
Sports

Indian shooter Manu Bhaker demands action against two Air India employees for alleged harassment

Manu, one of the country's brightest medal hopes at the upcoming Games, thanked Rijiju for his prompt intervention but is also hoping for action against the Air India officials at Delhi airport. Later, Air India, too, apologised for the conduct of its staff.

Centre raises domestic airfare by 10-30%; prices to be implemented till 31 March
India

Centre raises domestic airfare by 10-30%; prices to be implemented till 31 March

The Union Civil Aviation ministry increased the lower limit for flights with a duration of less than 40 minutes to Rs 2,200, and the upper limit in this band was set at Rs 7,800